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BOJA vs. TXRH: Which Stock Is the Better Value Option?

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Investors interested in Retail - Restaurants stocks are likely familiar with Bojangles and Texas Roadhouse (TXRH - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both Bojangles and Texas Roadhouse are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BOJA currently has a forward P/E ratio of 18.97, while TXRH has a forward P/E of 28.15. We also note that BOJA has a PEG ratio of 1.42. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TXRH currently has a PEG ratio of 2.38.

Another notable valuation metric for BOJA is its P/B ratio of 1.74. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TXRH has a P/B of 5.46.

These are just a few of the metrics contributing to BOJA's Value grade of A and TXRH's Value grade of C.

Both BOJA and TXRH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BOJA is the superior value option right now.


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